Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run? Question 4 options: Economic profits are $20 and accounting profits are minus $10 Economic profits are $40 and accounting profits are $0 Economic profits are minus $10 and accounting profits are $20 Economic profits are $0 and accounting profits are $40

Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run? Question 4 options: Economic profits are $20 and accounting profits are minus $10 Economic profits are $40 and accounting profits are $0 Economic profits are minus $10 and accounting profits are $20 Economic profits are $0 and accounting profits are $40

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.7IP

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Bob's lawn mowing service is a profit maximizing, competitive firm. Bob mows lawns for $27 each. His total cost each day is $280, of which $30 is a fixed cost. He mows 10 lawns a day. What can you say about Bob's economic and accounting profits in the short run ? A. Economic profits are minus $10 and accounting profits are $20 B.Economic profits are $20 and accounting profits are minus $10 C. None Which one?
Homework Question.Bob's lawn mowing service is a profit maximizingcompetitive firm. Bob mows lawns for $27 each. His total cost each day is $280 of which $30 is a fixed cost. He mows 10 lawns a day. What are Bob's economic and accounting profits in the short run
Billy’s Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. What is the Total profit for Billy’s Bean Bag Emporium? Include in your answer your calculation
Lisa lawn company (LLC) is a lawn mowing business in a perfectly competitive market for lawn moving services. The following tables set out Lisa's costs Quantity(lawn per hour) Total Cost(dollars per lawn) 0 $30 1 $40 2 $55 3 $75 4 $100 5 $130 6 $165 A. If the market price is $30 per lawn, How many lawns per hour does Lisa's LLC now? B. If the market price is 30 per lawn, What is Lisa"s profit in the short run? C. if the market price falls to $20 per lawn, how many lawns per hour does Lisa's LLC now? D. if the market price falls to $20 per lawn, what is Lisa's profit in the short run? E. At What market price will Lisa shut down?
Caroline opens a lemonade stand for two hours. She spends $15 for ingredients and sells $50 worth of lemonade. In the same two hours, she could have mowed the neighbor's yard and earned $10. a. What are Caroline’s explicit and implicit costs? b. What is Caroline’s accounting profit? What is her economic profit? Show how you calculated each profit.
Nicole purchased a new printing machine and started a small printing shop. As per her calculations, to earn revenue of $6,000 per month, she needs to sell printouts of 27,000 sheets per month. The printing machine has a capacity of printing 35,300 sheets per month, the variable costs are $0.03 per sheet, and the fixed costs are $2,200 per month. a. Calculate the selling price of each printout. Round to the nearest cent b. If they reduce fixed costs by $310 per month, calculate the new break-even volume per month. Round up to the next whole number c. Calculate the new break-even volume as a percent of capacity. ↑ % →
Delvin has a hot dog stand in a busy midtown area with similar stands on every block. The graph above shows the cost curves of Delvin’s Hot Dogs. The market price of a hot dog is $3. Answer the questions below and show all calculations where necessary. From the diagram, what is Delvin’s profit-maximizing output per day? Explain your answer. Calculate Delvin’s accounting profit per day. How will Delvin’s price and profit change in the long-run, assuming no change in technology or demand?
The Warren Watch Company sells watches for $27, fixed costs are $100,000, and variable costs are $14 per watch. What is the firm's gain or loss at sales of 7,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. $. What is the firm's gain or loss at sales of 20,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. $.
The WipeOut Ski Company manufactures skis for beginners. Fixed costs are $30. Fill in Table 7.16 for total cost, average variable cost, average total cost, and marginal cost., now imagine a situation where the firm produces a quantity of 5 units that it sells for a price of $25 each. a. What will be the company’s profits or losses? b. How can you tell at a glance whether the company is making or losing money at this price by looking at average cost? c. At the given quantity and price, is the marginal unit produced adding to profits?
Walt's Turkey Farm produced 400 turkeys last week. The marginal cost was $15 a turkey, average variable cost was $29 a turkey, and the market price was $33 a turkey. Did Walt maximize profit? If Walt did not maximize profit and if nothing has changed, will he increase or decrease the number of turkeys he produces to maximize his profit this week? profit, so if nothing changes he will Walt is the number of turkeys he produces to maximize his profit this week. O A. maximizing; decrease O B. maximizing; increase OC. maximizing; not change O D. not maximizing; increase O E. not maximizing; decrease
If Hasan runs the restaurant himself and before setting up this business, he was working in a company as a salesman for $15,000 per year. Hasan owns the building that his restaurant in housed in and could have rented it out for $10,000 per year. Those would be an implicit cost of opening his own restaurant. Calculate the economic profit?
Matthew Rafferty produces hiking boots in the perfectly competitive hiking boot market. The table contains information on Rafferty's total costs. Fill in the missing values for AFC, AVC, ATC, and MC in the table. (Enter your responses rounded to two decimal places.) Output per Week 0 1 2 3 4 5 6 7 8 9 10 Total Cost $400.00 500.00 580.00 640.00 705.00 775.00 850.00 960.00 1080.00 1215.00 1400.00 AFC $ AVC $ BE 172 ATC $ IND MC $

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	Economic profits are $20 and accounting profits are minus $10
	Economic profits are $40 and accounting profits are $0
	Economic profits are minus $10 and accounting profits are $20
	Economic profits are $0 and accounting profits are $40